With the recent uprising in Egypt, there has been a great deal of new investor interest in oil sands. The largest reserves located in Canada rival that of Saudi Arabia. The proximity of Canada and the congenial nature of its political system are a big plus.
However, oil sands are spread over a large area of land. The process is more like mining rather than drilling.
I think this is one of the most concise statements about the downside of using Canadian oil sands as a petroleum source for the future:
"There are some negatives, of course. Environmentalists dislike oil-sands technology because it is energy- and water-intensive. They claim it is turning the oil-sands region into a wasteland with strip mines and toxic-waste ponds. But they aren't likely to derail the projects, given political and business support in Canada.
Oil-sands production costs $30 to $40 a barrel—two to three times the cost of conventional crude extraction—and capital costs are steep; new integrated facilities cost about $100,000 per barrel of capacity. And turning the tar-like substance called bitumen into crude poses operational challenges, especially when temperatures plunge to minus-40."
Bary, Andrew, 2011. Seeking stability in the sands. Barron's, Feb. 5.
One professor in MIT LMP has calculated that the hole needed to dig oil sands for processing is the size of Illinois in surface area.
I think we all need to take a close look at energy issues. The Financial Crisis of 2008 has perhaps lulled many into believing that long-term petroleum supply has receded as a concern. This is a dangerous way of thinking.
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